Makaans for Masses
The soapbox is an opportunity for our Advisory Board members to express an opinion on an important industry issue. This month, Niranjan Hiranandani, the managing director of the Hiranandani Group of Companies, decries the fact that there are lots of promises made on providing makaan for the masses, but none are fulfilled.
Roti, Kapda aur Makaan… these are words that have been used often by the leaders of our country to convince people of their priorities and to show the masses that they care. But sadly, more often than not, such words have remained just words and nothing beyond.
India, today, is a nation that is self-sufficient in food production and our ability to clothe our people is also beyond reproach. But, unfortunately, something seems to have gone wrong in our promises to provide every one of our citizens a makaan to live in.
Who has the responsibility and who will fulfil these needs? These are some questions that need to be answered, and need to be answered fast. It is estimated that today we have a shortfall of 23 million homes, a shortfall that means that about 100 million people do not have a roof over their heads, a shortfall that causes untold hardships to them, a shortfall that means that they are at the mercy of natural elements.
While there have been a lot of schemes and a lot of promises to provide the masses with the elusive makaan, they have all fallen short of expectations. And who is to be blamed? All of us – the corporates, the government and the leaders – have to be blamed for this lack of foresight.
But we can still make a difference in the lives of millions of our citizens just by working together. Today, more than ever, there is a need for the private and the government sectors to take this challenge to provide each and every citizen of ours, a makaan.
How can we do it? In India, after agriculture, real estate is one of the biggest single contributors to the country’s economy.
It’s a sector that contributes almost 5% to the country’s GDP and, looking forward, it’s expected that within three years this contribution will rise to 8%. It is these facts that can allow us to guarantee a makaan to every one of our citizens.
The rise of this industry means that more and more people get employment. A lot of people employed by this sector are unlettered; a rise in this sector gives them hope to live on. But why are we stumbling?
Let’s take a look at the stumbling blocks. While the country’s leadership talks of providing citizens with homes, their actions do not seem to be in sync with their speech. Take the recent case of the central government’s plan to impose a 5% service tax on the real estate sector and a further decision of the Maharashtra government to impose 1% VAT on this sector.
The impact of both these decisions would be felt by the very people to whom the leaders have promised a makaan. So, the end-consumer will now have to pay an additional tax to the government that makes his or her dreams of owning a house more difficult.
Besides these moves by the government, rise in the price of cement, unavailability of land and labour, etc., are other issues that have been taking a toll on this sector. Under such circumstances, now, more than ever, it becomes very important to provide affordable housing to all the segments of society. We, on our part, have embarked on a mission to provide every one of our citizens a makaan.
We have already taken the lead towards affordable housing and are building townships in Thane, Chennai, Bengaluru and Hyderabad. Besides these projects, we are also in the process of providing housing that meets the needs of various segments of society. In the coming days, we plan to launch new projects in Thane, Chembur, Panvel, Ahmedabad and Pune. We have moved internationally in building an iconic 90-storeyed residential tower in Dubai.
We believe that affordable housing would be the driving force in the real estate sector. In the last 10 years, of the total houses made by the private sector, just 5% was dedicated to affordable housing. We believe that in the next ten years, about 50% of the construction would be in the realm of affordable housing.
Also, investment in real estate is the best out of all investments for the year 2010, and I would suggest investment:
a) in residential properties,
b) in properties under construction,
c) in large cities in the peripheral areas,
d) with builders/developers who have a good track record, and
e) where infrastructure of facilities is available within the project or in nearby areas.
I feel that 2010 is going to be great year for the real estate sector. Genuine buyers and investors should grab this opportunity to build their own dream homes.
So, while we intend to grow, we intend to grow with a conscience. A conscience that tells us that providing the elusive makaan to our people would be the best way forward.